Correlation Between Performance Technologies and Lanakam SA
Can any of the company-specific risk be diversified away by investing in both Performance Technologies and Lanakam SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Performance Technologies and Lanakam SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Technologies SA and Lanakam SA, you can compare the effects of market volatilities on Performance Technologies and Lanakam SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Performance Technologies with a short position of Lanakam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Technologies and Lanakam SA.
Diversification Opportunities for Performance Technologies and Lanakam SA
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Performance and Lanakam is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Performance Technologies SA and Lanakam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanakam SA and Performance Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Performance Technologies SA are associated (or correlated) with Lanakam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanakam SA has no effect on the direction of Performance Technologies i.e., Performance Technologies and Lanakam SA go up and down completely randomly.
Pair Corralation between Performance Technologies and Lanakam SA
Assuming the 90 days trading horizon Performance Technologies is expected to generate 7.87 times less return on investment than Lanakam SA. But when comparing it to its historical volatility, Performance Technologies SA is 1.58 times less risky than Lanakam SA. It trades about 0.02 of its potential returns per unit of risk. Lanakam SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Lanakam SA on September 17, 2024 and sell it today you would earn a total of 5.00 from holding Lanakam SA or generate 5.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 90.91% |
Values | Daily Returns |
Performance Technologies SA vs. Lanakam SA
Performance |
Timeline |
Performance Technologies |
Lanakam SA |
Performance Technologies and Lanakam SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Performance Technologies and Lanakam SA
The main advantage of trading using opposite Performance Technologies and Lanakam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Technologies position performs unexpectedly, Lanakam SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lanakam SA will offset losses from the drop in Lanakam SA's long position.Performance Technologies vs. Quest Holdings SA | Performance Technologies vs. Euroconsultants SA | Performance Technologies vs. CPI Computer Peripherals |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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